The Path to Cellulosic Ethanol

Crop residue is abundant and a good source of renewable energy, as long as its removal doesn't cause soil nutrient depletion and erosion.

By Lisa Gibson

Eight of the leading U.S. crops produce more than 500 million tons of residue each year, only a fraction of which can be removed for energy production because of equipment constraints and soil erosion concerns, according to a report by the U.S. DOE's Biomass Research and Development Initiative. Even so, crop residue is expected to play an early role in the development of the cellulosic ethanol industry because of its immediate availability.

The report, "The Economics of Biomass Feedstocks in the United States," lists the most common residue as corn stover and straw associated with wheat, rice, barley or oats production. In addition to cellulosic ethanol, these materials can be used for power generation through direct combustion, gasification or cofiring with fossil fuels.

Poet LLC has operated a demonstration-scale cellulosic ethanol plant in Scotland, S.D., for a year and a half, running on a steady diet of corncobs from local farms. Poet's next endeavor, dubbed Project Liberty, will establish a commercial-scale cellulosic ethanol plant in Emmetsburg, Iowa, in 2011 that will produce 25 million gallons, according to Scott Weishaar, vice president of commercial development for Poet and Poet Biomass.

Project Liberty will be an expansion of a current 50-million-gallon-per-year dry-mill plant called Poet Biorefining, according to Poet, and will require 750 to 850 tons of corncobs per day. The sheer volume of that supply seems staggering, but Weishaar isn't worried. "It's an extremely aggressive goal, but we believe we'll need 300 to 400 farmers involved to support full commercial activity of the cellulosic facility," Weishaar says. "Our objective is to have 100 farmers under contract this next year for cob collection around the Emmetsburg area."

The goal is more than attainable, as demonstrated by a November Project Liberty Field Day that drew many local farmers, some ready to sign on the dotted line. At the event, more than 60 farmers said they would be willing to supply corncobs to the plant, Weishaar says. "The next step would be for them to make their decision on the type of equipment or approach, and then Poet will be contracting with them."

Farmers contracted to provide feedstock for Project Liberty will need to invest in residue harvesting equipment, Weishaar explains. Currently, little cob collection is done in the country, so much of the required equipment is still in the prototype phase, but some is commercially available. "If they're going to invest in the equipment, we're going to invest in the farmer so the farmer knows he has a market for the cobs he collects," he says.

Soil Depletion, Erosion Risks

Removing residue can cause problems for the soil, depending on where the crop is located, the soil type and how much is removed, according to Noel Gollehon, senior economist with the USDA Natural Resources Conservation Service. Residue serves two main functions for the soil: it protects from rain, wind and erosion; and decomposes back into the soil as organic matter that is an important source of carbon and thereby an important element of soil quality, Gollehon explains. Some crops produce more residue than others and if only a little is present and promptly removed, it leads to soil depletion. In addition, some residues break down quickly, while others remain on the soil. "But as long as we replace the nutrients that are lost with it, it's a practice that can go on for some time," he says.

"We're staying way below the residue numbers as far as what we're leaving on the field," Weishaar says. "We want to be good stewards of the soil and the last thing we want to have happen is the farmer taking too much material where he opens himself up to nutritional loss or erosion issues."

To make sure this doesn't happen, Iowa State University is conducting region-specific studies in the Emmetsburg area to determine best practices for residue removal. The study includes two extreme scenarios: taking everything off the corn field; and traditional combining where all residue is deposited back onto the field. The research will also evaluate four variations in between and will monitor soil condition, nutrients and other crucial issues. "We want to make sure we can answer those questions for the farmer and more importantly the landowner, on what are the impacts to the soil if it's [removed] one year, three years or whatever it may be for my soil," Weishaar explains. The results were due in February and at press time Weishaar believed they would not deter interested farmers from participating in Project Liberty. "We're confident that it will not be harmful to the soil, that the results will be very positive," he says. Thus far, soil concerns have not steered farmers away, but they do want to know what data is available and what to expect, he adds.

Project Liberty is on task as far as permitting goes, so the next step is to generate farmer contracts. "The third leg on the stool is activities surrounding E15 and expanding the market," Weishaar says. "The last thing you want to do is build a plant if you don't have an available market to sell the ethanol to. The E15 legislation that will allow our market to expand is vital, as well."

Added Revenue

"We're opening up a new revenue stream for the farmer and creating a new cash crop in the sense that we're going to buy what today is a waste product," Weishaar says. "It's a residue that's thrown back out on the field."

"The revenue piece is a big piece of this," says Craig Reeder, vice president of Hale Farms in Oregon. "It's potential revenue as a crop in rotation, which is helpful for us out here." Hale Farms plants 25,000 acres of green peas, lima beans, sweet corn, wheat, potatoes, grass seed, onions, alfalfa, timothy hay and grain corn. Every year, about 20,000 to 30,000 tons of residues are harvested from most of those crops, excluding onions and potatoes, by PowerStock, a biomass supply chain company. Hale Farms has contracted with PowerStock's parent company, Pacific Ag Solutions, for about 10 years.

PowerStock, which was recently established to expand Pacific Ag's residue work, harvests a total of 150,000 tons of residue per year in Oregon and Washington, handling the entire process so farmers don't have to do anything more than what's required for their primary crops. "When you're in the business of agricultural residue removal, you're in the business of following another farmer's harvesting equipment at the right speed, taking off the right amount-not too much or too little-and completely removing it from the field," says Steve Van Mouwerik, PowerStock CEO. "For them, it's a service we provide, but for us, it's how we manufacture a product that we can sell."

It's a different approach from Poet's, because Van Mouwerik believes it's not economical for farmers to harvest residue from their own fields. "The important thing about agricultural residue removal is that the farmer can't afford to remove his own agricultural residue because it means purchasing additional harvesting equipment," he says. That additional equipment is typically too expensive to harvest just one farmer's field. "In order to have the proper levels of productivity for a harvest season for agricultural residue equipment, the norm is that one operator will cover a number of farms," he says.

Reeder agrees. "To do it right and to do it timely and cover the acres, that's a several-million-dollar capital investment," he says. "And it happens right at harvest time, so when we're harvesting those crops, we would have to add an entire new set of overhead and an entire new set of equipment and an additional harvest process." PowerStock's strategy allows the farmers to stay focused on their primary crops. "Pulling off ag residue does give you that extra little peck on the cheek at the end of the year that allows you to be a little bit more competitive on your other crops," Reeder says. "It also allows you to take a look at some alternative crops."

Until now, PowerStock has harvested crop residue to be processed and shipped to Japan and Korea for cattle feed, or sold to domestic dairy operations. This year, however, the company will be involved in its first anaerobic digestion (AD) project in Oregon. PowerStock is also evaluating its involvement in a second AD project in Oregon. They both will involve wheat straw, grass straw and corn stover. "What's new is the ability to utilize agricultural residue from crops in digestion, in bio-oils or in syngas," Van Mouwerik says.

The market for agricultural residue is undoubtedly larger in Japan, China and Korea than in the U.S., Van Mouwerik says, but he believes the domestic market will grow. "Japan and Korea can pay more at this point for their feedstock than what is currently used in cost models for feedstock for digesters or cellulosic ethanol," he says. "That's not a problem because they're also more demanding when it comes to quality and have some sanitary restrictions. So there's an opportunity for a whole segment of agricultural residue that can't be exported to go into projects here."

PowerStock allows cost-sharing and risk-sharing with farmers who are interested, as an alternative to just clearing the residue and paying the farmer. "If they believe there's an upside in the market, they can do a cost-sharing strategy where you can split the upside," Reeder says. "That's one of the innovative things they've done that's gotten a lot of growers interested in their process."

Experience has sharpened PowerStock's ability to meet farmers' best practice requirements in harvesting to maximize supply aggregation. PowerStock has relied on Oregon State University to develop practices with growers that ensure the right amount of residue is removed to sustain the condition of the soil, Van Mouwerik says. "Everyone is mindful of what the soil needs because the farmer wants to keep growing his corn and his wheat and his soybean crop, and really it's a matter of formalizing that stewardship as much as it is just doing it," he says. The beauty of PowerStock's operations is that the farmer can dictate how much residue to take or leave, Reeder explains. "If you tell them to leave three inches of straw, they can come in and leave three inches of straw," he says. "They don't have to scalp it right down to the ground."

Residue has a fertility value in the soil, but it can be managed, Reeder says. Removal is helpful when dealing with heavy residue that is difficult to till back into the soil and usually would need to be burned. "It's not something you have to worry about, but you have to manage it correctly, especially on some of the dry-land acres," he says. Weishaar cites ongoing studies that, early on, have found it beneficial for wheat crops following corn when cobs are removed. "Not having it on the field could actually be a positive thing," he says.

Reeder sees great potential in residue removal, including a growing opportunity for options in mono-crop agriculture. "If we can get these fiber crops to work and turn this fallow ground into some perennials for the fiber, it's really going to be a benefit to everybody," Reeder concludes. "It'll reduce our carbon footprint and provide us with some crop options and alternatives. [PowerStock] is really helping solidify those markets and create those markets and it's going to be a huge, huge benefit to what we're doing." BIO

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